I am pleased to transmit legislation and supporting documents to
implement the United States-Chile Free Trade Agreement (FTA). The
Agreement will further open Chile's markets for U.S. manufactured
goods, agricultural products, services, and investors. It will
increase competition and consumer choice. The FTA will enhance
prosperity in the United States and Chile, serve the interest of
expanding U.S. commerce, and advance our overall national interest.

The U.S.-Chile FTA is the first United States free trade agreement
with a South American country. We hope the FTA will add momentum to
Chiles continued implementation of the free market economic policies
that have made Chile a model for its Latin American neighbors. This
Agreement will also encourage other countries in the Western Hemisphere
to follow Chiles path, furthering our efforts to establish a Free Trade
Area of the Americas.

My Administration is strongly committed to securing a level playing
field for America's workers, farmers, and businesses. The Congress
helped advance that policy by passing Trade Promotion Authority in the
Trade Act of 2002 (the "Trade Act"). The Congress can help us take
another important step by approving this Agreement and the implementing
legislation. United States workers and businesses are currently at a
competitive disad-vantage in the Chilean market. Chile is an associate
member in Mercosur and has FTAs with many other countries, including
Canada, Mexico, and the 15 members of the European Union. Securing an
FTA with Chile will ensure that U.S. workers and businesses will
receive treatment in the Chilean market that is as good as or better
than their competitors.

In negotiating this FTA, my Administration was guided by the
negotiating objectives set out in the Trade Act. More than 85 percent
of trade in consumer and industrial goods between the United States and
Chile will be free of duties immediately upon implementation, and most
remaining tariffs on U.S. exports to Chile will be eliminated within 4
years after that. More than three-quarters of U.S. farm goods will
enter Chile duty free within 4 years and all duties on such goods will
be phased out over 12 years. At the same time, the Agreement includes
measures to ensure that U.S. firms and farmers have an opportunity to
adjust to imports from Chile.

This Agreement opens opportunities for our services businesses,
which now account for nearly 65 percent of our gross domestic product
and more than 80 percent of employment in the United States. Chile
will grant substantial market access to U.S. firms across nearly the
entire spectrum of services, including banking, insurance, securities
and related financial services, express delivery services, professional
services, and telecommunications.

This Agreement provides for state-of-the-art intellectual property
protection and recognizes the importance of trade in the digital age by
including significant commitments on trade in digital products. In
addition, it ensures that electronic commerce will stay free of duties
and discriminatory rules.

United States citizens and businesses that invest in Chile will
have significant increased protections. This Agreement promotes rule
of law and enhances transparency and openness in order to foster a more
secure environment for trade and investment. Furthermore, Chile will
provide U.S. investors with important substantive protections that
Chilean investors already enjoy in the United States.

The United States and Chile have also agreed to cooperate on
environment and labor issues and to establish mechanisms to support
those efforts. A number of important cooperative projects that will
promote environmental protection are identified for future work. The
FTA encourages the adoption of high labor and environ-mental standards,
obligates each country to enforce its own labor and environmental laws,
and makes clear that domestic labor and environmental protections may
not be reduced in order to encourage trade or investment. The
Agreement also preserves our right to pursue other legitimate domestic
objectives, including the protection of health and safety, consumer
interests, and national security.

Trade and openness contribute to development, the rule of law,
economic growth, and international cooperation. Chile is a close
partner of the United States, and this Agreement will strengthen those
ties.

With the approval of this Agreement and passage of the implementing
legislation by the Congress, we will advance U.S. economic and
political interests, while encouraging others to work with us to expand
free trade around the world.